Skip to main content

The big three - My take on the US auto makers


I have been closely following the big three car makers for the past many years. Though I was the least surprised on Chrysler's filing bankruptcy, the somewhat contradictory positions of the bigger two leads me to believe that to undo the shortcomings of the past, just good products are not enough. A better management plays a bigger role in a company's survival and recovery.

Let me try to explain -

Chrysler - Though the former name Daimler Chrysler leads one to think that the company would have had the strongest products line in the US, it seems Chrysler hardly benefited in any model launch since the marriage. Except for the Pacifica, I find it hard to find any other model which showed traits of German Engineering. In the past few years, the only cars worth remembering from this manufacturer are the Chrysler 300C and Dodge charger. Honestly, when I look at the older models like the 300, Concorde, Intrepid I wonder what happened to the design gurus at Chryslser that they started churning out Calibers and Avengers. Did Daimler Benz have a role to play here? Though the company is bankrupt today, it proposed line up of EVs, the new 300, 200 ev looks more promising than any of its models in the past decade. This again leads me to think, did the merger with Diamler actually do more harm than good to Chrysler. Agreed that the exit has not been a bed of roses for the German either but it has had a ruining effect on its partner across the pond. I just hope that with Fiat infusing some much needed cash, the company starts chugging again and reaches the design and product leadership it was so well known for. Having recently read an article about the new leadership of Chrysler and the enthusiastic young CEOs, Chrysler seemingly is in the best position in decades to regain its lost share.

GM - GM's bankruptcy did came to me as a bit of a surprise. Of the Detroit big three, during the last 3 - 4 yrs, GM probably had the best product line. As is the case however with any large company, wrong decisions of the past couple decades would have taken more than just good products to shed the excess baggage, especially in an environment where competition is fierce and lesser popular entrants (from S. Korea) are gaining significant market share. GMs revival started with the launch of the new Malibu and its realization that to survive it needs products at the lowest end of the market as well. Though the Aveo wasn't the best execution, it was a contributor to the mind shift at GM (the company and its dealer network) that a small car is required to complete the portfolio and allow GM to at least be considered as an option for entry level car buyers. Honestly, I fell in love with the new Camaro and was pleasantly surprised by the Cadillac CTS line. With the CTS, GM not only proved that they are capable of launching great products, but they also have a great product line up planned. The crossover platform was also a winner and the Buick enclave on this platform was another car I came to love. These great cars led me to believe that GM has learnt from its past and the future looks better and the bankruptcy filing was a little shock.

Ford - This is the classic example of better management and not necessarily better products coming to the rescue of a manufacturer. While Chrysler and GM took the bankruptcy route, Ford chose to chug along with its resources. Though at that time, there was not a single product which Ford could claim to be a winner in any of the segments, the management's vision, etched shortly after Allen Mulally took over the ruins, was the single reason Ford could live through this situation. I believe the most important decision at Ford was to unify the global product offerings, especially those in the European and American markets. From my personal experience, I could vouch that Ford's European offerings were much better than those in America (I took a Ford Focus 1.6 Zetec for a 700 mile trip in the UK and instantly came to love it. I cannot say the same for the Focus offered in America). With this decision, Ford had a better outlook for its products which today is well proven by its offerings in all segments - right from the Fiesta to the new Explorer. I do commend the management for taking the bold steps of shedding off the unprofitable brand names and earning much needed cash in the process, something GM could not do partly because it had integrated its acquisitions much tightly than ford (for e.g. SaaB vs Volvo) diluting those brands in the process. Even after being in the process of an optimistic recovery, Ford did not hesitate to close down the Mercury brand realizing that the gap between Ford and Lincoln brands is not wide enough for Mercury to fit in. Today Ford seems well positioned to take back the slot it lost to Toyota a few years back and has managed to improve its processes where it now offers better quality than those of its Asian counterparts (of course, the Toyota fiasco of sticky pedals has only helped the recovery). It may take a few months / quarters for the Americans to embrace Ford again, but Ford seems to be moving in overdrive to claim its rightful position in the marketplace.
Labels:

Comments

Post a Comment

Popular posts from this blog

I owed this to Honda

Back in 2011, I wrote a blog about Honda . More specifically, I wrote about my disappointment with Honda. I felt Honda had lost its charm both on the design and performance sides and started producing boring cars, especially in the US. Towards the end of that post, I wrote about my anticipation for the 2012 Civic considering the last generation (2006 model) was such a great car. Well, to put it mildly, Honda continued down the disappointing path. The 2012 model was a bigger disappointment than I had anticipated and led me to wonder what will it take to awaken the people running this iconic brand. Well, it seems the all-around criticism for such an endeared (and mainstream) model did the trick and Honda majorly revised the Civic for the 2013 year. Major revisions within one model year are rare, if not unheard of and almost always are forced due to the costs. Since then, Honda has done a great job with "almost" every model in its lineup. The 2013 Honda Accord was refreshi...
Post a Comment
Read more

Is America warming up to wagons?

Throughout the automobile history of almost 125 years, every major manufacturer has at some point in time produced a Station Wagon or Estate version of its most successful sedans. Some European manufacturers have launched a few models as estate only versions. Like other models, they have seen success and failures. In America however, wagons have never been able to enjoy the same success which other body types have seen. In Europe wagons are one of the most popular body types for family or personal transportation. They offer the comfort and driving pleasure of a car and can carry enormous amount of cargo. To me, this is one of the most sensible forms of family transportation. In the world's largest automobile market however, they account for less than 1% of total sales. The reason for this was pretty clear till the economy and oil prices started hitting us hard. Cheap oil for decades and the American culture of "make e'm big" meant that if you need a car with more spa...
Post a Comment
Read more

What's up with Honda

There was a time when I was a huge fan of every vehicle Honda produced. This affection for the brand probably came from my liking of the Hero Honda 97.2 cc motorbike produced in India since the mid 1980s. I was fascinated by the sound of the 4 stroke engine as it reminded me of the Enfield Bullet (a bigger bike) with a much deeper 4 stroke note. People of my generation who grew up in India, always looked up to the Bullet as the ultimate riding machine (no offense, BMW). When I heard Hero Honda for the first time, my reaction (as would have been of every other Indian) was that " this sounds like a Bullet ". As I grew up, my affection for all things automotive and cars in particular also increased and Honda occupied a special place there. When Honda started producing cars in India, they came out with a model called the Honda City. Launched in 1.3 and 1.5L gas (petrol) engine configurations, these cars had a power output of 90 and 100 BHP respectively and were the most pow...
Post a Comment
Read more